Russian 5c MP3 site 'unlicensed'

But protected by legal loopholes

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Analysis For some time now we have been tracking the progress of a Russian MP3 site called Allofmp3.com. To recap, Allofmp3 is one of many Russian internet sites that are openly offering MP3 files from a central server. Other popular sites include club.mp3search.ru and www.mp3spy.ru. For either $14.95 a month (capped at 1000 tracks per month) or for individual tracks at one cent per megabyte, it's fantastically cheap.

The site is clearly targeting English-speaking users as well as Russians with its vast range of British and US repertoire. All the tracks are encoded on the fly at the bit rate of your choice and when you download the Allofmp3 Explorer program, you can set whole albums to download while you wait. All in all, it's just as convenient as iTunes - plus it's compatible with Linux, Mac and PC - but obviously rather cheaper and with less gaps in the contemporary catalogue. So the obvious assumption would be that it's completely illegal.

The answer is far from clear. The site is not licensed by any labels. However, currently there is an exemption under existing Russian copyright legislation (Article 39 for the aficionados) allowing phonograms to be performed publicly without the authorisation of the copyright owner for broadcasting and cable transmission. The Internet could be deemed to fall under this exemption. A similar argument can be applied to copies in the cache memory of computers.

So as IFPI Russia's legal adviser, Vladimir Dragunov, concedes: "Because of these loopholes we don't have much chance of succeeding if we attack these companies who are using music files on the Internet under current Russian laws."

As for the authors/publishers' rights, matters are more complex. Whilst the current law makes it clear that there is a need for licences to cover the use of musical works on the Internet in Russia, a fallout between the Russian Authors' Organisation (RAO) and the Russian Organisation for Multimedia and Digital Systems (ROMS), which had been licensing Russian digital music services on its behalf, means that Allofmp3 is no longer licensed despite its claims to the contrary.

RAO terminated its agreement with ROMS at the end of 2003, complaining that it had received very little money and no accounting details from the four-year-old body which RAO had itself helped to found. "They told us they had 200 licences but they would not even tell us who they were licensing," RAO's Vadim Dunin told MusicAlly.

So now RAO is preparing to license sites such as allofmp3 itself. The trouble for Russian rights owners is keeping track of Internet piracy when physical piracy is so much of a problem. With piracy levels of 66 per cent and a pirate CD market worth an estimated $312 million, according to figures from the IFPI, it's not surprising that a representative from Russia's labels association, NFPP, told MusicAlly that "the internet just isn't a priority for us now."

New copyright legislation is in the offing but it's a painfully slow process. The first reading of the new legislation took place back in October 2001 and this month saw another possible date for the second reading missed by the new Duma, the Russian parliament. But even the labels are not assuming that the new laws are a done deal.

"We have very great resistance to this new law in Russia," concedes IFPI's Dragunov. ®